International climate adaptation funding flows must grow at least tenfold, UN warns
The UN has stated that public finance flows for climate adaptation to the most vulnerable nations and regions must increase at least tenfold if global agreements on sustainable development are to be met.
The UN Environment Programme (UNEP) has today (2 November) published a major new report assessing the global needs for adaptation-related funding and funding levels to date. By subtracting the former from the latter, it has calculated the current and likely future adaptation finance gap.
Developing nations are likely to need at least $215bn and up to $387bn of international public finance for climate adaptation each year this decade, as the physical impacts of rising global temperatures and changing weather patterns begin to crystallize to a greater extent, the report states.
Yet just $21bn of public multilateral and bilateral adaptation funding was provided from developed nations to developing nations in 2021, the last year for which data is available. This funding level was down 15% year-on-year. This means the annual adaptation funding gap for 2021 was at least $194bn.
The UNEP admits in the report that it underestimated the adaptation finance gap previously with the new figure more than 50% higher than the previous calculation.
Wealthy nations pledged at COP26 in Glasgow in 2021 to scale their international adaptation finance support to $40bn annually by 2025. The UNEP is concerned that this ambition will not be delivered without a major change in approach.
Included in the report are seven levers which policymakers can use to increase financing. Chief among them is supporting sweeping reforms of the global financial infrastructure for multilateral and bilateral organisations, which are currently ongoing through the Bridgetown Agenda. This international workstream is spearheaded by Barbados and was launched at COP27 in Sharm El Sheikh last winter.
Additionally outlined in the UNEP are ways in which governments can more effectively use public finance to crowd in private finance; ideas for supporting SMEs building climate resiliency solutions in the Global South and ways in which to embed climate-related stress tests to funding decisions.
Loss and damage
The report emphasises the potential returns on investment in adaptation, stating that each million dollar investment could result in up to $14m in avoided economic damages.
Included in the document is a calculation that the 55 most climate-vulnerable economies worldwide have collectively experienced losses and damages of more than $500bn in the last two decades through events such as flooding and drought.
This level of loss and damage will “rise steeply in the coming decades”, the report warns, particularly if efforts to curb global emissions continue to lag. Global energy-related emissions rose around 1% year-on year in 2022 according to the International Energy Agency (IEA). The Agency expects further rises until 2025.
“Even if the international community were to stop emitting all greenhouse gases today, climate disruption would take decades to dissipate,” said UNEP’s executive director Inger Andersen.
“So, I urge policymakers to take heed of the Adaptation Gap Report, step up finance and make COP28 the moment that the world committed fully to insulating low-income countries and disadvantaged groups from damaging climate impacts.”
COP27 saw wealthy nations U-turn on their historic opposition to the creation of a dedicated global funding pot for loss and damage. But the fund is yet to be operationalised, because nations are continuing to dispute which nations should be eligible to pay in and which should be able to receive payments out. A key sticking point is the status of China.
Extra talks on the logistics of the fund have been tabled for 3-5 November in Abu Dhabi, with the hope of shoring up more consensus before COP28 begins in Dubai at the end of the month.
It is worth noting that COP27 also saw the launch of the Sharm El Sheikh Adaptation Agenda, a new pledge to improve climate resiliency in communities that are home to four billion people. The COP27 Presidency also spearheaded the launch of a plan to dramatically scale the global coverage of early warning systems by 2027.
An initial annual update on these programmes may well be provided in Dubai.
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